BEFORE THE STATE TAX COMMISSION OF UTAH
Petitioner, : INFORMAL DECISION
COLLECTION DIVISION OF THE : Appeal No. 87-0116
STATE TAX COMMISSION OF UTAH, ) Acct. No. XXXXX
STATEMENT OF CASE
This is an appeal to the Utah State Tax Commission from a decision of the Collection Division of the Utah State Tax Commission(Respondent) to assess a penalty on the additional tax due as a result of an audit covering the period XXXXX. An Informal Hearing was held on XXXXX, in the offices of the Utah State Tax Commission. David J. Angerhofer, Hearing Officer, heard the matter for the Commission. XXXXX represented the Petitioner. As a result of an audit covering the period from XXXXX, it was determined that an additional tax of $$$$$ was due. Respondent assessed a penalty of $$$$$ and interest of $$$$$ on the delinquent tax. Petitioner noted that XXXXX was incorporated in XXXXX and began business in Utah in XXXXX. Petitioner stated that this was a first time audit for the company and that, according to Tax Commission auditors, the penalty should not be assessed on first time audits. Petitioner also stated that, according to Tax Commission Use Tax Regulation U8, a penalty is imposed if a company is negligent or intentionally disregards the rules and regulations. The additional taxes do not arise from negligence or intentional disregard. Petitioner requests waiver of the penalty.
The present Commission does not have a policy of waiving the penalty on first time audits. Although this may have been an informal policy under a prior Commission in situations involving minor amounts of tax, there is presently no rule, regulation or statute which would justify such a reduction. The present Commission finds that a first time audit is not sufficient justification to warrant the waiver of penalty. The Commission finds that Petitioner was negligent in failing to timely file the tax in question. Although this is the first audit of XXXXX, Petitioner shares management with other XXXXX and should have been aware of the law in Utah. In addition, the additional tax assessed represents a very large percentage of the total tax liability for this period. Petitioner had the burden of proof to establish that Respondent assessed the penalty in error. Petitioner failed to meet this burden of proof.
DECISION AND ORDER
It is the Decision of the Utah State Tax Commission that Petitioner's request for waiver of penalty on sales and use tax account No. XXXXX for the period XXXXX be denied. The assessment of penalty and interest by the Collection Division of the Utah State Tax Commission is hereby affirmed.
DATED this 7 day of August, 1987.
BY ORDER OF THE STATE TAX COMMISSION OF Utah
R. H. Hansen G. Blaine Davis
Joe B. Pacheco Roger O. Tew